Which term refers to the act of misleading an insurer for personal gain?

The term that refers to the act of misleading an insurer for personal gain is fraud. In the context of insurance, fraud can take many forms, such as providing false information during the application process, exaggerating claims, or staging accidents. The essence of fraud is the intent to deceive, which ultimately aims to secure financial benefits that are unjustified.

Understanding fraud in insurance is crucial because it not only affects the financial health of insurers but also leads to increased premium costs for honest policyholders. Therefore, insurance companies have mechanisms in place to detect and prevent fraudulent activities, making it a serious offense within the industry.

The other terms have distinct meanings that do not align with the act of misleading insurers. Subrogation refers to the insurer's right to pursue a third party that caused an insurance loss to recover what they paid to the insured. Risk management involves assessing and mitigating risks to minimize potential losses. Indemnity refers to the principle of compensating for losses incurred, restoring the insured to their financial position before the loss occurred. These concepts are integral to the insurance process but do not encompass the act of deception for personal advantage.